Listen to this article:

The proposed privatisation of the electricity department of Puducherry has evolved into one of the most politically sensitive governance controversies in the Union Territory in recent years. More than an administrative reform, the issue has exposed tensions between public ownership and corporate expansion, labour rights and market-oriented governance, and regional accountability and centrally driven economic reforms. At the centre of the debate lies a fundamental question: should a profitable public utility be transferred into private hands in the name of efficiency?

The controversy intensified after the incorporation of Adani Electricity Puducherry Limited, a subsidiary linked to the Adani Group, amid ongoing discussions over electricity-sector privatisation. The move strengthened public perception that the restructuring process was gradually moving toward a predetermined corporate transfer rather than an open institutional reform. What initially appeared as a bureaucratic exercise soon transformed into a larger political battle over the future of public infrastructure and democratic accountability.

Puducherry’s electricity department: The last profitable public sector?

Puducherry occupies a unique economic position within India. Unlike larger states possessing extensive industrial taxation or natural-resource revenues, the Union Territory depends heavily on tourism, excise duties, registration revenues, and public-sector services. Within this limited fiscal framework, the electricity department has historically been considered one of the few stable and revenue-generating institutions under direct government control.

Official reports of the department show that the Annual Revenue Requirement (ARR) of the utility crossed nearly Rs 1,500 crore during the 2019–2022 period. The department’s ARR stood at approximately Rs 1,496 crore in FY 2019–20, Rs 1,537 crore in FY 2020–21, and crossed Rs 1,602 crore in FY 2021–22. Revenue generated under existing tariff systems consistently exceeded Rs 1,400 crore annually during this period. These figures significantly shaped the political debate because they challenged the narrative that the utility was financially unsustainable.

Trade unions repeatedly described the department as “the last profitable sector” within the Union Territory’s public system. Their argument was not merely ideological but deeply economic. If even a functioning and revenue-generating utility could be privatised, then the rationale for public ownership itself appeared increasingly uncertain.

Unlike many debt-ridden electricity distribution companies in India struggling with heavy losses and subsidy burdens, Puducherry’s relatively compact urban geography and manageable consumer base allowed the department to operate under comparatively stable conditions. This distinction fundamentally altered the political nature of the privatisation debate.

Rising electricity consumption and strategic importance

The strategic importance of the electricity department becomes clearer when examining Puducherry’s rising electricity demand. According to official Energy Audit Reports, Puducherry purchased nearly 3,600 million units (MU) of electricity annually during FY 2023–24, with net energy input into the system standing at approximately 3,474 MU. The total billed energy exceeded 3,104 MU during the same period.

In FY 2022–23, the department recorded nearly 3,374 MU of purchased energy and over 2,908 MU of billed energy. These figures indicate the scale of electricity dependency within the Union Territory despite its relatively small geographical size. The department supplies electricity across all four regions of Puducherry, Karaikal, Mahe, and Yanam, making it one of the most critical public-service institutions in the UT’s administrative framework.

The department’s Aggregate Technical and Commercial (AT&C) losses, while still........

© The Wire